Mnangagwa's economic boom claims queried

Published: 30 September 2018

Economists and opposition figures have cast doubt on government claims that Zimbabwe's per capita income has risen by 60% to $1 500 over the last eight months at a time the economic outlook continues to deteriorate.

The increase was reported to be from a per capita income of around $900 at the end of 2017, suggesting that Zimbabwe's national income had grown significantly in the 10-month period since President Emmerson Mnangagwa took over from Robert Mugabe.

However, former Finance minister Tendai Biti said the government's claims did not make sense because the economy had not grown for the past six years.

"The economy has not grown since 2013, so per capita income cannot increase when GDP is receding because per capita income is just aggregated GDP," he said.

"So, in any event, the population is actually increasing and the GDP is decreasing so the per capita income must fall, so it (per capita income of $1 500) is a charlatan.

"It does not happen that the population is increasing, GDP is decreasing and then per capita income rises."

Economist John Robertson also disputed the $1 500 per capita saying it was not based on facts.

"Falling currency value means you get a larger number of the units without getting an increase in wealth or income. it doesn't seem to me that that is what they (government) are claiming (over the $1 500 per capita income figure)," he said.

"They are claiming that there has been a recovery in industry or commerce and I do not think there has been."

The Mnangagwa government has also in the past claimed it had brought in $16 billion in foreign direct investment (FDI) since the first half of the year, a third of Africa's 2017 FDI.

According to the Zimbabwe Investment Authority, this number was grossly misstated as investors were still just scoping out the country for potential investment market.

This comes as the government is aggressively seeking to grow the economy to a middle income one with a per capita income of $3 500 by 2030.

Per capita income is defined as a measure of the amount of money earned per person in a certain area, according to American financial literacy website Investopedia.

As such, a per capita income of $1 500 would translate to a national income of $20 358 840 000 at the end of the eight-month period and $12 215 304 000 from 2017 when multiplied against the Zimstat 2017 total Zimbabwean population of 13 572 560.

Using these figures, the stated growth in the per capita income suggests that the country has added $8 143 536 000 to its national income in just eight months.National income is the total amount of money earned within a country, different from the gross domestic product (GDP) as the latter measures the portion of domestic residents' income received from domestic production of final goods and services. - the standard